California health insurance news update

California seems to be moving ahead with its plans to build a health insurance exchange despite the current controversy surrounding the Affordable Care Act. The federal health care law is currently awaiting ruling from the Supreme Court after lengthy and uncomfortable litigation last month. Speculation suggests that the Court may rule the law as unconstitutional, or at least a part of which, which means that states would no longer be required to build insurance exchanges. California lawmakers are well aware of the possibility that the law will no longer apply to them, but have expressed interest in pursuing the initiative regardless of the fate of the law.

The state has already received more than $40 million from the federal government to help build the exchange. California lawmakers have passed legislation to clear the way for an exchange, but have not yet used the majority of the money provided by the government. Though the money is still there and mostly untouched, Peter Lee, executive director for the state’s exchange program and former official from the Department of Health and Human Services, claims that California is not lacking any commitment to the program.

Lee notes that the state has already acquired the aid of an IT company, the name of which will be revealed in May, 2012. The infrastructure for the exchange is already under development and the state has hired Ogilvy & Mather to handle marketing and public relations for the program. Lee also claims that exchange and state officials have met with insurance companies Kaiser Permanente and Blue Cross Blue Shield. These meetings are described to have been “very positive.”

There are approximately 5 million people without health insurance of any kind in California, according to Lee. This problem could be remedied through the establishment of a health insurance exchange. The exchange is meant to bring consumers access to affordable coverage and help drive down insurance prices by introducing more competition to the market. There is some concern that the existence of an exchange would not encourage healthy people to purchase insurance coverage, which could mean that insurance prices would rise instead of fall. California’s Health and Human Services Secretary Diana Dooley, has said that the state may adopt an insurance mandate similar to one that is currently enacted in Massachusetts as a way to mitigate this potential problem.